10 tips every beginner stock investor should know

1.Each stock should be treated as an individual business. It should not be the case where one buys a share just because their prices mostly follow the increasing pattern. Investment should never be done with borrowed money. It becomes pretty risky when an individual decides to borrow money and buy stocks. It becomes stressful when stocks see a loss.

2. It is also a very good idea to hold a stock for a long span of time than invest in small termed ones just for quick gain. The short term gains are handled by high fee fund managers. It is always suggested to not put your money in high fee investments.

3. It is also important to have a perfect estimation of your risk tolerance. It is a psychological condition, which is effected by one’s education, income and various other factors. It is judged by how much a person is able to risk to gain something. The risk tolerance varies from person to person. So, it is very important to have a clear idea about your risk tolerance.

4. One should have a very good control over his or her emotions during difficult times. This is an important of investing in stocks. Taking a decision in panic or joy is not what one should do if he is a stock market investor. Emotions should never be the one taking the decisions. Rather a sane and calm mind should be doing that. It is better to stick to your goals than take a decision just because you have some short term losses. The bigger picture should always be kept in mind.

5. Diversification of investment is a suggestion, that many experienced investors speak about. It is a wise decision to own stocks of different companies of different genres from different regions and sometimes different countries. One should always be well versed about the company whose stock one is going to buy. Diversification also helps you to recover from the losses.

6. Experienced investors always advise to not be influenced by others. Just because someone has invested in a particular company does not mean even you have to. It is a better idea to follow your own instinct than the general trend.

7. Many small companies give you a chance to have a good investment but do not have the necessary brand awareness. So, one should have an open mind while choosing is investment options. But it is also necessary to have detailed information about the stock you are going to invest in. It is not a very good idea to put your money just going by the name of the company. Also, it is a good idea to avoid investing in businesses that you don’t understand. Be clear with the proceedings of the business before putting your money at stake.

8. It is also needed that you have realistic goals and not have a beyond imagination expectation from an investment. But that does not mean to have a similar kind of expectation from all the stocks that you have invested in.

9. One should always monitor is investments rigorously. Anything happening in the world can be a reason for the fall of financial market. Therefore it is important to have a thorough update of the events. Changes and updates should be done to the portfolio to suit the present scenario.

10. It is also necessary to keep taxes in mind. Do not be very worried about it but do not altogether neglect it. Experienced investors always say that the stock exchange business is not for the weak hearted ones. The wise ones also advise one to be not too greedy or too fearful.